LIC Amrit Bal is a children-focused savings-cum-insurance plan that allows parents, grandparents, and legal guardians to invest in a structured way for a minor’s future. The policy is non-linked and non-participating, which means the returns are not tied to the stock market, and you get clearly defined guaranteed benefits. The structure is simple: you pay premiums for a chosen term, LIC adds guaranteed amounts on your basic sum assured each year, and at maturity, your child receives a lump sum that can support education, career, or marriage goals.
Unlike bank FD and RD, where money is parked in your own name and is easy to break whenever there is a short-term need, this plan mentally and practically ring-fences the money for the child. It encourages discipline because you see it as the child’s future fund, not just another savings account. When the policy term ends, the child gets a planned, targeted amount instead of a random figure that may or may not match real costs.
LIC Amrit Bal Policy
| Feature | Details |
|---|---|
| Plan Type | Non-linked, non-participating children’s savings-cum-insurance plan |
| Who Can Be Insured | Child (usually from 30 days to early teens) |
| Who Can Purchase | Parents, grandparents, or legal guardians |
| Policy Purpose | Building corpus for education, higher studies, career, or marriage |
| Policy Term | Aligned with child’s age, typically maturing between 18–25 years |
| Premium Payment | Single premium or limited premium payment terms (few years) |
| Minimum Sum Assured | Generally starts from a modest amount suitable for middle-class families |
| Maximum Sum Assured | No strict upper cap, subject to underwriting and income profile |
| Benefit Type | Guaranteed additions plus basic sum assured on maturity |
| Protection Element | Life cover with death benefit during policy term |
| Liquidity Options | Loan facility after acquiring surrender value (subject to rules) |
| Typical Use Cases | Child’s school, college, higher education, setting up career or marriage |
Key Features That Make Amrit Bal Stand Out
The strongest attraction of LIC Amrit Bal is its guaranteed nature. Instead of leaving you at the mercy of market ups and downs, the plan offers fixed, pre-determined additions on the basic sum assured every policy year. Over a long period, these yearly additions build up into a sizeable corpus, which is far more predictable than trying to guess what interest rates or market returns will be 10–20 years down the line.
Another key feature is the flexibility in premium payment. You can either choose to pay a lump sum once (single premium) or opt for limited premium payment terms, where you pay for a few years while the policy benefits run longer. This works very well for salaried parents who want to finish contributions early and stay free while the money keeps growing quietly in the background for their child.
How LIC Amrit Bal Policy Works In Real Life
- Imagine your child is five years old and you want a strong corpus when they turn 22 and are ready for higher education or professional courses. You choose a suitable sum assured and a term that matches that age. You then pay premiums for a limited number of years, depending on the option you select. Every year, LIC credits guaranteed additions on the basic sum assured, increasing the eventual maturity value.
- When the policy matures, your child receives the basic sum assured plus all those accumulated guaranteed additions as a lump sum. This kind of amount is typically enough to make a meaningful dent in higher education expenses, hostel fees, coaching, or even initial career-related costs like relocation or starting a small venture. If any unfortunate event happens during the policy term, the death benefit and accrued additions offer financial support, something bank FDs and RDs simply do not provide.
Why Many Are Choosing It Over FD And RD Options
Parents are moving from FD and RD to LIC Amrit Bal policy for one simple reason: purpose. While FDs and RDs are generic savings tools, this plan is built from the ground up for child planning. It is designed to solve a specific problem rising future expenses for education and marriage through a dedicated and disciplined structure. When you put money into FDs, it often gets used for other emergencies or temptations. With Amrit Bal, you are far more likely to leave the money untouched because it is mentally tagged as your child’s future fund. Another big reason is the combined benefit of growth, protection, and tax efficiency. FD and RD interest is fully taxable, which quietly reduces your real returns, especially if you fall into a higher tax bracket. In contrast, a well-structured child policy can offer more tax-friendly treatment on both premiums and benefits, depending on the rules in force. On top of that, you get life cover, guaranteed payout, and loan options, which make the overall value proposition much stronger for long-term goals.
Tax Benefits and Liquidity Options
One of the practical reasons LIC Amrit Bal Policy Explained: Why Many Are Choosing It Over FD and RD Options is trending is the tax angle. Premiums for such traditional insurance plans often qualify for deductions up to the prescribed limit, which directly reduces your taxable income. The maturity proceeds, subject to the conditions of the income tax law, are usually structured so that they can be tax-efficient or even tax-free in many cases. This is a huge contrast to FDs and RDs, where every rupee of interest is added to your income and taxed as per your slab.
Liquidity is another area where the policy strikes a smart balance. You are not completely locked in without options. After the policy acquires a surrender value, you can take a loan against it if there is a serious need. This way, your long-term plan remains intact, but you still have an emergency back-up without breaking the policy. For many middle-class families, this combination of discipline plus optional liquidity is extremely valuable.
Who Should Seriously Consider This Plan
LIC Amrit Bal policy is ideal for:
- Parents who want a ring-fenced, goal-based fund specifically for children, rather than scattered savings.
- Grandparents who want to gift something more meaningful than cash or gold, with a long-term impact.
- Families who prefer predictable, guaranteed returns instead of taking chances with market volatility.
- Those currently relying only on FD and RD for child planning and realising that future costs will likely outgrow these instruments.
If your child is still young and you have at least 10–15 years before big expenses begin, you are in the perfect zone to consider this policy. The earlier you start, the smaller your annual strain and the larger the eventual corpus. When viewed this way, LIC Amrit Bal Policy Explained: Why Many Are Choosing It Over FD and RD Options becomes less of a marketing statement and more of a practical reality in many households.
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How To Fit Amrit Bal into Your Overall Financial Plan
- This policy does not have to replace every other investment you have. In fact, it often works best as the solid, guaranteed pillar of your child’s portfolio, alongside things like mutual funds, PPF, or Sukanya Samriddhi (for daughters). You can think of it as the “non-negotiable base” that must be there, so that whatever happens in the markets, your child still has one reliable source of funds.
- Start by fixing a realistic target. Estimate what higher education might cost 15–20 years from now, factor in inflation, and then map how much of that you want this policy to cover. From there, a suitable sum assured and premium structure can be chosen. The goal is not just to buy any policy, but to align LIC Amrit Bal with the specific milestone you want to fund.
FAQs on LIC Amrit Bal Policy
1. Is LIC Amrit Bal really better than FD and RD for children?
For short-term parking of money, FDs and RDs are fine. But for a long-term, focused child goal, LIC Amrit Bal generally offers more structured benefits: guaranteed additions, life cover, and potential tax advantages, all packaged specifically for education and future milestones.
2. What happens if I cannot continue paying premiums?
If you stop paying premiums after a certain minimum period, the policy may become paid-up instead of lapsing fully. In that case, the benefits reduce but do not disappear completely.
3. Can I take a loan against LIC Amrit Bal policy?
Yes, once the policy has run long enough to acquire a surrender value, you can usually take a loan against it.
4. Is LIC Amrit Bal market-linked or guaranteed?
LIC Amrit Bal is a traditional, non-linked plan. That means it does not invest in the stock market on your behalf.
